Stored value cards of different kinds, such as gift cards, are commonly used as a means of payment against a pre-paid account. Used in this way, they are referred to as debit cards.
Debit cards are commonly printed and sold with a face value, say $25. The purchaser pays for the card, which is then good for 25 dollars' worth of the goods or services promoted by the card. When the card is used to make a purchase, the card number is used to identify an associated account. If sufficient funds remain in the account, the account is debited with the value of the purchase, otherwise the purchase is refused. It is becoming increasingly common to sell such cards from open retail spaces. Cards sold in this way are ‘activated’ (i.e. associated to an account having a positive balance) only after they have been paid for. Prior to sale, they are associated with an inactive account: one that has, in effect, a balance of zero. This arrangement has two significant advantages: first, the retailer does not have to pay for the card until it is sold; and second, there is no incentive to steal cards on display, as they have no value.
There are a several ways of providing for the activation of accounts. Patent application WO 97/39 899 describes a packaging system where the code required to initiate the activation procedure is held on a magnetic stripe on the card. The card is packaged in such a way as to leave its magnetic stripe exposed, so that it can be read by point of sales equipment without removing the card from the packaging. The packaging is arranged to hide the card number and Personal Identification Number (PIN) that will be used for carrying out transactions once the card has been activated. Any attempt to view these numbers surreptitiously, leaves a trace on the packaging. The sales clerk checks the integrity of the packaging before initiating the authorization procedure. There are two disadvantages of this system: first, the packaging is complex and relatively expensive to produce, and second, the exposed magnetic stripe is easily damaged during transport and handling.
These disadvantages are partially addressed by US patent application No. 2002/043 558, which describes a packaging system with an aperture through which a number carried on the card, possibly the card number, is visible. An exterior surface of the packaging is provided with a magnetic stripe. The card is enclosed and sealed inside the packaging, and then an encoding derived from the exposed number is written onto the magnetic stripe. This has the advantage that the card is protected from damage during transport and handling, but it has the disadvantage that the card number is exposed to view.
US patent application No. 2006/0273153 discloses a secure packaging system for stored value cards, where no part of the card is visible through the sealed packaging. However, the '153 application does not disclose a practical system for bringing cards and packaging together. High speed production systems need to be able to package thousands of cards per hour. There is a need for a method of bringing cards and packaging together that reconciles the speed and reliability requirements of a modern production environment.